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Obasanjo orders NITEL to pay interconnect debt to GSM operators

Posted by By Okoh Aihe, Communications Editor on 2005/07/27 | Views: 345 |

Obasanjo orders NITEL to pay interconnect debt to GSM operators


THIS may not be the best of times for the incumbent operator NITEL as the organisation last weekend attracted the ire of the President, Chief Olusegun Obasanjo who ordered it to pay up its interconnect debt to the GSM operators running into several billions of naira.

ABUJA—THIS may not be the best of times for the incumbent operator NITEL as the organisation last weekend attracted the ire of the President, Chief Olusegun Obasanjo who ordered it to pay up its interconnect debt to the GSM operators running into several billions of naira.

NITEL’s total debt portfolio to the GSM operators alone stands at about N13bn, comprising of N6bn to MTN, N4.5bn to Vmobile and over N2bn to Glo.

But playing host to the GSM Consultative Forum, Chief Obasanjo, our source at the meeting disclosed, ordered NITEL to meet all its financial obligations to the mobile operators.

Aside of the debt issue the Forum which recently launched the Joint Economic Development Framework, JED, a document detailing the contributions of the GSM operators towards NEEDS took their case to President Obasanjo to explain while they need more palliatives from the federal government.

The President therefore set up a committee to look into the contributions of the GSM operators towards NEEDS which is a cardinal policy of government. Members of the committee are drawn from the Ministry of Communications, Ministry of Finance, Nigeria Investment Promotion Council, NIPC, and the National Planning Commission.

Vanguard gathered that he was also fully appreciative of developments in the Communications sector and was particularly happy with the GSM operators for their contributions to creating jobs in the country.

Both formally and informally, the GSM operators have created over 145,000 jobs since 2001 while contributing about N205.94bn to the national treasury as at the first quarter of 2005, according to the JED document.

Unfortunately, in spite of huge profits in the past few years, the two things that have dominated are the interconnect debt crisis which prompted the regulator, the NCC to arrange an impromptu conference on June 28, 2005, and the harsh operating environment which is threatening to reverse the kind of rapid gains recorded in the past few years. And this obviously may have taken the centre stage in the discussions between Chief Obasanjo and the GSM operators.

Based on the JED document, the operators have a cocktail of complaints matched equally with another cocktail of demands. Complaints range from lack of needed infrastructure in the operating environment to multiple taxation and withdrawal of concessions by the government.

For instance, between 2001 and 2004, at least N216million was paid by the operators to both State and Local Government as double taxation on building permits. The Lagos State Government proposed a legislation on telecom masts and towers, which has led to litigation, while the Nigerian Civil Aviation Authority is seeking to implement 1000 per cent to 5000 per cent increases in charges on masts and towers.

The Federal Government on its own has withdrawn the concession on duties given the operator. While under concessions duties climbed down from 25 per cent to 5 per cent, with the concession withdrawn in 2003, the operators are complaining that average duties paid for importation of telecom equipment and accessories presently is about 40 per cent representing 600 per cent increase.



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